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2019Investor Presentation
M AC R O
ECONOMIC FUNDAMENTALS ARE SOLID THE HOME IS THE MOST IMPORTANT ASSET
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Personal consumption remains robust and supportive of GDP growth
Unemployment is at decade lows and wages continue to rise
Consumer confidence is near record highs
Home equity has increased more than 2x since 2011 driven by home price appreciation
Millennials are accelerating household formation as they age into prime home buying years
Falling mortgage rates should drive an improvement in housing turnover
The macro backdrop remainssupportive of consumer spendingin Home Furnishings
WE WILL CONTINUE TO TAKE SHARE AS THE ~$130B U.S. HOME FURNISHINGS MARKET REMAINS HIGHLY FRAGMENTED…
2Source: Euromonitor, the Census Bureau & third party market research
45%55%
of total revenues
~25,000COMPANIES
of total revenues
COMPANIES50T
OP
- including -
50TOP
WILLIAMS-SONOMA,INC.
I N D U S T R Y
Significant opportunity for growth in a highly fragmented market
Online growth has significantly outpaced total industry growth over the past 5 years…
…AND THE SECULAR SHIFT FROM BRICK-AND-MORTAR TO ONLINE CONTINUES
CAGR (online) ~15%
CAGR (industry) ~5%VS.
…yet, the industry remains under penetrated online
of sales from stores >80%
As the world’s largest design-led, digital-first home retailer, we are shaping the future of shopping.
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We are a digital-first company with retail stores as a competitive advantage
INT
O T
HE
FU
TU
RE
D I G I TA L - F I R S T
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E-commerce comp growth YTD
10%>55%of sales are E-commerce
online retailer in North America
25TOP
Source: 2018 Internet Retailer Top 500
UNIQUE PLATFORM multi-channel model | multi-brand portfolio | vertically integrated supply chain | leadership and culture
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We have built a highly differentiated platform to launch and scale new businesses
INT
O T
HE
FU
TU
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HISTORY OF SUCCESSFUL NEW BUSINESSES AND INITIATIVES
1986 1999 2003 2005 2011 2012 2017 20181956
P L AT F O R M
2001
Runwayfor growthacrossaestheticsand pricepoints Aesthetics
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WE
PB
LOW PR I C E D H I G H PR I C E D
MO
DE
RN
TR
AD
ITIO
NA
L
RJWSH
G R O W T H
Price Points
WE HAVE THE LEVERS TO ACCELERATE GROWTH AND DOUBLE BRAND REVENUES TO $3B GLOBALLY
CHANNEL GROWTH
OPPORTUNITIES
G R O W T H L E V E R : B R A N D
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West Elm is ourbiggest growth opportunity
AXES OFGROWTH
➡ Industry-leading original design content with 90% of designs developed internally
➡ Focus on function and sustainability – a competitive differentiator
➡ 20% brand awareness leaves significant runway for customer growth
➡ Significant acceleration in new customer growth trend YTD➡ Continued growth in digital
penetration: currently at >50% ➡ Acceleration of highly profitable
new store growth strategy: 20% average 4-wall profits, 2yr payback
➡ International expansion in new markets: India and Western Europe
➡ Expansion in core product categories with a focus on functionality and design
➡ New categories growth such as: Bath, Outdoor, and Seasonal Decorating
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DESIGN AND VALUES
LEADERSHIP
BRAND AWARENESS
ANDCUSTOMER
ACQUISITION
PRODUCTWHITE SPACE
A powerful, proven platform to grow and scale new businesses across lifestyles and life stages
➡ Focus on high-performing baby business - key entry point to the brands ➡ Aggressively scale new businesses Marketplace and PB Apartment ➡ Expand in high-growth core categories and develop assortments
in adjacent categories to complete the home8
➡ Diversify product assortment and aesthetic ➡ Amplify sustainability commitments - a key differentiator ➡ Improve retail profitability, and optimize retail fleet
A ROADMAP FOR CONTINUED PROFITABLE GROWTH – CONTRIBUTING +50% OF TOTAL COMPANY GROWTH
EXPECTANT BABY TODDLER KID TWEEN TEEN COLLEGE YOUNG ADULT EMPTY NESTER
G R O W T H L E V E R : B R A N D
** *
* NEW BUSINESSES
POTTERY BARN FAMILY OF BRANDS REPRESENT OVER $3B IN REVENUES TODAY
ADULT
M A R K E T P L A C E *
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➡ Pivot our focus to digital while reducing unprofitable stores and capitalizing on more high-impact remodels
➡ Balance marketing investments to drive brand awareness, new customer acquisition and retention
➡ Improve profitability through top line growth, expense control and margin expansion
Return to strong, profitable growth through innovation, relevancy and customer engagement
➡ Lead with product design and authenticity
➡ Expand proprietary and private label businesses
➡ Foster strategic relationships with key partners in the development of collaborative, exclusive assortments and content
➡ Deliver rich customer experiences in-store and online leveraging our expertise in cooking and design
G R O W T H L E V E R : B R A N D
WE ARE AGGRESSIVELY EXECUTING ON OUR TRANSFORMATION PLAN
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GROWING NUMBER OF CROSS-BRAND INITIATIVES TO DRIVE INCREMENTAL REVENUES
SIGNIFICANT REVENUE GROWTH OPPORTUNITY WITH CROSS-BRAND CUSTOMERS
G R O W T H L E V E R : C R O S S - B R A N D
We are unlocking the powerof our unique platform through cross-brand initiatives
more spend thansingle brand customers4x
of total customerbase is cross-brand 30%
SIGNIFICANTLY INCREASE OUR SHARE OF WALLET AND ENHANCE CUSTOMER EXPERIENCE
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ALREADY AT SCALE BUT PLENTY OF ROOM TO GROW
2x higher purchase frequency 3x more likelihood to shop across multiple brands 5x sales lift through reward redemption
members since launch 2.5 years ago6.4M
more spend than non-members3x
The Key loyalty program is highly accretive to growth
Increase customer engagement and brand loyalty
Effective marketing tool to introduce WSI portfolio of brands
Improved personalization of content and offers
G R O W T H L E V E R : C R O S S - B R A N D
We are aggressively pursuing the B2B opportunity
G R O W T H L E V E R : C R O S S - B R A N D
$36Baddressable market for WSI
total market $78BTHE B2B MARKET IS LARGE, FRAGMENTED & RIPE FOR DISRUPTION
➡ Contract Furniture Building Products Paint Flooring
➡ Lighting ➡ Residential Furniture
Surface Material ➡ Kitchen/Bath Products
Fabric/Wallcovering Window Treatments
➡ Outdoor Products ➡ Other
12.5 10.1 8.6 8.2 7.8 7.0 7.0 6.2 5.5 2.8 1.5
0.8
$78.0BTOTAL MARKET
U.S. B2B MARKET ($B)
Source: Industry research
OUR COMPETITIVE EDGE OVER EXISTING PLAYERS
Design and productdevelopment expertise
Breadth of aestheticsand price points
Support for allB2B opportunities,
large and small
On-the-groundsupport for worldwide
sourcing
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RETAIL
Retail StoreBuilds
and Malls
HEATHCARE + WELLNESS
Senior Living,Hospitals, Health
and Fitness
Our path to $2B inB2B revenues
G R O W T H L E V E R : C R O S S - B R A N D
COMMERCIAL
Commercial, Workplace and
Sports/ Entertainment
Arenas
EDUCATION
EducationalEstablishments and University Housing
HOSPITALITY
Hotels, Resorts, Restaurants,
Country Clubs
WE ARE PURSUING TARGET ACCOUNTS ACROSS 7 INDUSTRY VERTICALS
➡ .
WARRIORS, CHASE CENTER AND WILLIAMS-SONOMA, INC. ANNOUNCE
EXCLUSIVE HOME FURNISHINGS PARTNERSHIP
FOR IMMEDIATE RELEASEMay 30, 2019
RESIDENTIAL
Single andMulti-Family Designers
and Developers
GOVERNMENT
GSA Certification,Governmentand Military
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G R O W T H L E V E R : I N T E R N AT I O N A L
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CHINA/SE ASIA
$150B
INDIA MARKET
$10B
Global expansion is a long-term growth opportunity
Source: WSI estimates
PRIORITY MARKETS
EXISTING MARKETS
Competitive Advantages
➡ Superior supply chain and product cost leverage
➡ Development of multiple business structures to meet market requirements (company-owned/franchise/wholesale)
➡ E-commerce prowess proven across the world
Business Mandate
➡ Profitable growth with high ROIC ➡ Strong sharing of competencies with partners ➡ Aggressive e-commerce penetration ➡ Low capital investment
WITHIN 3 YEARS OUR GLOBAL FOOTPRINT WILL GROW TO 20 COUNTRIES WITH A COMBINED ADDRESSABLE MARKET OF $330B
AUSTRALIA
$10BMIDDLE EAST
$20B
CANADA/MEXICO
$20B
W. EUROPE MARKET
$120B
Superior customer service is oxygen forgrowth
TECHNOLOGY INNOVATION DRIVING A BEST-IN-CLASS OMNI-CHANNEL EXPERIENCE
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ASSETS
1 #1 FURNITURE SUPPLY CHAIN
CULTURE
INNOVATION
Faster time to market for growth focused ideas
EXPERIMENTATION
In-house tech platform to “test & learn”
OUTCOME OVER OUTPUT
Measure success based on the value it brings
to customers
EXCELLENCE
High quality standards, scaled and stable shared services
GOALS + OUTCOME
3 FRICTION-FREE COMMERCE
(PHY-GITAL)
4 OPERATIONAL EFFICIENCY
Offering quality products and outstanding customer service has been our goal since the first Williams Sonoma store opened in 1956.” – Founder Chuck Williams
“
Data Platform
OrganizationalAgility
AI Machine Learning
3D Visualization
Modular Architecture
Robotics and Automation
G R O W T H AC C E L E R ATO R : C U S TO M E R E X P E R I E N C E
2 INSPIRING DIGITAL EXPERIENCES
As the world’s largest design-led, digital-first home retailer, we are shaping the future of shopping.
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